turning off 3G solved the problem
given my experience 3G should not be the default
Also the iphone should be smart enough to figure out whether or not to use 3G
If you have 2.0.2 firmware on your phone, you should have good battery life with 3G - so that there is not a reason to turn it off.
The current Apple fix for the iPhone not picking up 3G in a 3G area is to switch to airplane mode and then turn Airplane mode off. Not ideal, but it works.
I have great luck with 3G until i go into an Edge area, then when I return to 3G coverage my phone will stay on Edge until I do the Airplane mode trick. I leave my phone on 3G all the time now as i see no reason to disable it - i just wish it would come back on automatically when i return to good 3G coverage area.
when 3G is not available, the phone should return to EDGE. I also noticed sometimes the phone did not return to 2G when 3G was not available. What I do: if just for calls, turn off 3G, WIFI and GPS to gain better battery power and connectivity. Use 3G only when need for faster data connections.
I have 2.0.2 but your workaround doesn't work for me. Perhaps I am in an area where 3G exists but is very weak ? In any case I am leaving 3G off for now